In this Issue
Rental Income? Cut your Tax Bill!
Ebay: VAT on Postage
Employer Job (PRSI) Incentive Scheme
Employers’ obligations under employment law
Deadlines and Reminders
PM Services
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Parfrey Murphy
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Rental Income? Cut your Tax Bill!
by Kieran Kennelly

We have recently been given details of a tax shelter that provides capital allowances against rental income over a 7 year period.  A €100,000 capital investment will provide capital allowances of €58,240 for the first 6 years and €38,827 in year 7 all against rental income.  Therefore if an individual makes €60,000 rental profit in a year the investment will save him / her an annual income tax liability of nearly €30,000 per annum.

The investment is attractive for 3 main reasons:

  • It can save someone in receipt of rental income significant levels of income tax, PRSI and levies over 7 years.  Effectively the right investor will save nearly €200,000 in income tax, PRSI and levies (under current rates) for a €100,000 investment. This is effectively nearly doubling their original €100,000 investment.
  • The investment is in an extremely well established institution in the medical sector.
  • Good capital allowances schemes are becoming extremely rare.

The scheme will close in the next few weeks and therefore if you are interested you should contact Noel Murphy or Kieran Kennelly for further details.


Ebay: VAT on Postage
by Colette Thomas

There are quite a number of sellers out there who are profiting from postage and packaging charges on Ebay. But before you complain the next time you purchase something on Ebay, bear in mind the hidden costs of postage and packaging – Jiffy bags, bubble wrap and labels do not come for free and more importantly – a VAT registered seller needs to pay VAT to Revenue on the total payment received which includes the cost of postage and packaging (which in a lot of cases will be inclusive of VAT at 21%).  This is due to postage being classed as a service provided to the buyer.  Worse still – there’s no VAT to claim back from the postage the seller buys.


Employer Job (PRSI) Incentive Scheme
by Kevin Nyhan

If an employer hires a new employee during 2010 and that employee meets the qualifying criteria, then the employer will not have to pay employers PRSI in respect of that employee for one year. The rate of employers PRSI is either 8.5% or 10.75% of the employee’s gross pay. The scheme can cover employees already hired since the start of 2010 as well as any hired before the end of 2010.

The main criteria are that the job must be a new position of at least 30 hours work per week, that the new employee must have been in receipt of social welfare payments for at least 6 months or in a FAS work placement programme for 3 months and that the new job must be for at least 6 months. However, each application must first be approved by the Department of Social Protection before the scheme can be applied. You will need to complete a PRSI 20 form and send it with a current tax clearance cert to the Department of Social Protection (address on form).

There is a limit to the number of new employees an employer can hire – 5% of existing workforce or, for smaller businesses, maximum of 5 jobs.

Full details of the scheme can be found on the Department of Social Protection’s website.


Employers’ obligations under employment law
by Mary Blyth

All employers should be familiar with a number of basic provisions under Irish employment law. As an employer, it is your responsibility to ensure all your employees receive certain basic employment rights. Although some industries require employers to meet different requirements, the main obligations are as follows...



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Deadlines and Reminders
by Sinead Herlihy

Deadline - 14 July 2010

Return and payment of dividend withholding tax for June 2010.

Return and payment of professional services withholding tax for June 2010.

Return and payment of relevant contracts tax for June 2010.

Return and payment of PAYE / PRSI for June 2010.

Return and payment of quarterly PAYE / PRSI for April / June 2010.

 

Deadline – 19 July 2010

Return and payment of bi monthly VAT return and payment for May / June 2010.

Return and payment of bi annual VAT return and payment for January / June 2010.

 

Deadline - 21 July 2010: Corporation Tax

Preliminary corporation tax for accounting periods ending 31 August 2010.

First installment of preliminary corporation tax for accounting periods of large companies ending 31 January 2011.

Corporation tax returns for accounting periods ended 31 October 2009.

Balance of corporation tax due for accounting periods ended 31 October 2009.

Third party information returns for accounting periods ended 31 October 2009.

 

Remember, where returns and payments are made electronically the return and payment deadlines are extended to the 23rd day of the month. 

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